Firm Releases Inaugural 2020 State of Equity Plan Management at Private Companies Report Highlighting How Private Companies Globally are Implementing and Managing Their Equity Compensation Plans

NEW YORK & CALGARY--(BUSINESS WIRE)--Shareworks by Morgan Stanley, a leading equity plan management platform and division of Morgan Stanley at Work, today released new proprietary research revealing that more private companies are digitizing their equity plans to help streamline the administrative burden, increase transparency and communication among employees. Despite the growing importance of equity compensation as a means to attract and retain employees, the report found that administering these plans remains challenging for equity plan administrators.

The new research report, The State of Equity Plan Management at Private Companies, was commissioned by Shareworks by Morgan Stanley to benchmark company mindsets and behaviors surrounding equity plan management, and to understand how companies are implementing and managing equity compensation plans. The report also provides insights into the current landscape and industry trends surrounding equity plan management, related priorities and challenges, the types of plans currently offered and employee engagement.

�Our report shows that equity compensation ? both the practice and profession ? will only continue to grow in value, significance and impact in the coming years,� said Marcos Lopez, Co-Head of Morgan Stanley at Work. �In a changing business landscape and a world of economic uncertainty, it is becoming critically important for companies to engage and motivate employees to help shape their future and create the financial lives they want.�

Jeremy Wright, Co-Head of Global Private Markets at Shareworks by Morgan Stanley, added, �For both employees and employers, equity is playing a bigger role in compensation than ever before. We are proud to launch our first study and feel it will provide companies with the latest industry trends and insights to help them stay competitive, make informed decisions, and set up their equity plan for long term success.�

Among the report�s key findings:

Equity Stock Plan Administration is Going Digital

The report shows that with the growing importance of equity in compensation at private companies, more are going digital to help manage and streamline the administration of their employee equity stock plans and compensation. 77% of companies report that they are currently using digital stock plan certificates, while 80% have or are interested in integrating an online employee equity portal for equity management. However, many are still in the transformation process with only 42% of organizations citing that they have fully made the transition to electronic stock certificates. The use of digital can also potentially help companies save themselves from significant future challenges as they evolve and enable their plans to scale when they add more employees and shareholders to their plans.

Equity Compensation is Becoming More Important to Attract and Retain Employees

Equity compensation continues to be an important part of the compensation package for employee recruitment and retention, with 36% of executives citing that the primary reason for equity compensation plans was to attract and retain talent. Furthermore, in the technology industry, equity-based compensation packages are increasingly standard. Of the equity professionals surveyed, 78% said that they believe the role of equity as part of their overall compensation strategy will grow over the next five years.

Equity Plan Administration Challenges and Evolution

The report further shows equity plan administrators are working closer with Human Resources to create plans that benefit both the employer and employees. However, challenges associated with equity plan management remain consistent. Equity plan administrators cite strategic concerns such as understanding tax consequences (32%) and setting up a new plan (29%) are the most difficult parts of the job. Additionally, the report found equity administration is evolving from a purely administrative role to a more strategic role. When asked if equity plan management was their main function within their companies 36% of respondents cite equity plan management was only one part of their role.

Shareworks by Morgan Stanley presented the results of the 2020 State of the Equity Plan Management at Private Companies Report in a virtual event on October 21, 2020. To get a copy of the report, including full results and for more information about Shareworks by Morgan Stanley, please visit www.Shareworks.com.

Morgan Stanley acquired Solium Capital Inc. in May, 2019 and the company was subsequently rebranded Shareworks by Morgan Stanley. Shareworks is a leading equity plan management platform that provides software and administration services to more than 3,900 corporate clients, with 2.7 million participants in more than 150 countries, transacting in over 50 currencies.

Shareworks is a part of the Morgan Stanley at Work suite of financial solutions which also includes Retirement and Financial Wellness. Morgan Stanley at Work combines cutting-edge planning and risk management software, Morgan Stanley intellectual capital and financial education delivered through multiple channels to enable employees to build a holistic plan to achieve their financial goals. Shareworks currently has offices in the U.S., Canada, Europe, and Asia-Pacific.

About Morgan Stanley Wealth Management

Morgan Stanley Wealth Management, a global leader, provides access to a wide range of products and services to individuals, businesses and institutions, including brokerage and investment advisory services, financial and wealth planning, cash management and lending products and services, annuities and insurance, retirement and trust services.

About Morgan Stanley

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing investment banking, securities, wealth management and investment management services. With offices in more than 41 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For more information about Morgan Stanley, please visit www.morganstanley.com.

Methodology: 2020 State of the Equity Plan Management Private Markets Report

The findings in this report are based on propriety, third-party research and survey data conducted by Rebel & Co. 391 senior corporate decision-makers�including CEOs/Founders or equivalent, Chief Human Resources Officers, Chief Financial Officers, Designated Equity Plan Administrators and Certified Equity Professionals�employed at private companies across various industries globally participated in market and client surveys, as well as one-on-one interviews. Company sizes ranged from under 100 to over 1,000 in worldwide employee headcount. Respondents were interviewed using an online panel survey, with video interviews conducted in August 2020. The range of issues covered included attitudes and perspectives relating to equity and plan administration, as well as priorities/challenges, types of plans currently o?ered, and employee engagement.

� 2020 Morgan Stanley Smith Barney LLC. Member SIPC

Contacts

Media Relations: Katrina Clay, [email protected]